The Transportation Security Administration (TSA) renewed a Lease for office space in the Airport Terminal Building on December 11, 2017.  This Lease was for 1,961 square feet of office space on the second floor of the Terminal Building, and has a ten-year term, with the first five years a firm term.  The Lease commenced June 1, 2017, and expires on May 31, 2027.  TSA intends to add three additional rooms to this Lease, adding 690 square feet.  TSA required some minor improvements to the space prior to occupying the space, and agreed to reimburse the Airport for these improvements.  Amendment 1, approved by the City Council on November 26, 2018, provided TSA's authorization for reimbursement of the tenant improvement costs for these three additional rooms.  Now that the tenant improvements are complete, a second amendment to the Lease is necessary to add the space to the Lease and update the rental amount to include this additional space. This Amendment 2 revises the Lease to include the addition of the 690 square feet and revises the rental amount to include this space.

City Council may:

• Approve Amendment 2 to the Terminal Building Lease adding space for the TSA; or
• Disapprove Amendment 2 to the Terminal Building Lease adding space for the TSA.

The addition of the 690 square feet to this Lease will provide the City with an additional $33,108.96 each year until the end of the first five-year firm term, ending May 31, 2022.  The revised annual rent for all the space under this Lease will be $127,205.66 per year.  Rentals after the firm term ends will be re-calculated and determined no less than 90 days prior to the new rate effective date.

Staff recommends that the City Council approve Amendment 2 to the Terminal Building Lease with the U.S. Government for the benefit of the TSA, authorizing the addition of 690 square feet to the Lease and revising the rental amount.